IGM Financial Inc. Reports 2004 Earnings-Increases Dividend
Readers are referred to the disclaimer regarding Forward-Looking Information and Non-GAAP Financial Measures at the end of this Release.
Winnipeg, February 18, 2005: IGM Financial Inc. reported net income attributable to common shareholders, excluding the items noted below, of $615.6 million for the year ended December 31, 2004 compared to $533.5 million in 2003. Earnings per share were $2.31 compared to $2.01 in 2003, an increase of 14.9%.
Net income in 2004 excludes a charge to earnings recorded in the fourth quarter of $28.8 million ($19.2 million after tax) which includes both compensation payments to certain unitholders of Investors Group and related costs resulting from settlement agreements with regulatory agencies (unitholder compensation). Net income in 2003 excludes:
- a dilution gain of $14.8 million recorded in the third quarter resulting from the reduction in the Company's percentage ownership of Great-West Lifeco Inc. related to their acquisition of Canada Life;
- the reversal of $24.8 million ($15.6 million after tax) of restructuring costs related to the acquisition of Mackenzie Financial Corporation recorded in the fourth quarter; and
- a non-cash income tax charge of $24.8 million recorded in the fourth quarter arising from increases in Ontario income tax rates and their effect on the future income tax liability related to indefinite life intangible assets.
Net income attributable to common shareholders, including the items noted above, was $596.4 million for the year ended December 31, 2004 compared to $539.1 million in 2003. Earnings per share were $2.24 compared to $2.03 in 2003.
Net income attributable to common shareholders for the three months ended December 31, 2004, excluding unitholder compensation noted above was $161.3 million compared to $143.8 million in 2003 excluding the dilution gain, the reversal of restructuring costs and the non-cash income tax charge noted above. Earnings per share were 61 cents compared to 54 cents in 2003, an increase of 13.0%.
Net income attributable to common shareholders, including the items noted above, was $142.1 million for the three months ended December 31, 2004 compared to $134.6 million in 2003. Earnings per share were 53 cents compared to 51 cents in 2003.
"Mutual fund assets under management reached a record high in the quarter as a result of strong equity markets and positive mutual fund net sales," said Jeffrey Orr, President and Chief Executive Officer.
Gross revenues for the year ended December 31, 2004 were $2.119 billion compared to $1.874 billion last year. Gross revenues for the fourth quarter were $548.1 million compared to $484.8 million in the prior year. Operating expenses were $1.236 billion for the twelve months and $336.9 million for the fourth quarter in 2004 compared to $1.030 billion and $245.7 million respectively in 2003.
Mutual fund assets at December 31, 2004 totalled $83.3 billion, compared to $74.7 billion at December 31, 2003.
Shareholders' equity at December 31, 2004, was $3.5 billion compared to $3.2 billion at December 31, 2003. Return on average common equity for the twelve months excluding the regulatory settlement was 19.8% compared to 18.9% for the same period in 2003 excluding the dilution gain, the restructuring costs and non-cash income tax charge.
Investors Group's Operations
The number of Investors Group Consultants was 3,496 at December 31, 2004, compared to 3,223 at December 31, 2003.
Mutual fund sales for the year ended December 31, 2004 were $4.7 billion compared to $4.0 billion in the prior year. Mutual fund net sales for the year were $218 million compared to net redemptions of $839 million in the prior year. In the fourth quarter mutual fund sales were $1.1 billion compared to $998 million a year ago and mutual fund net redemptions were $46 million compared to net redemptions of $93 million last year.
"The growth in our distribution network to approximately 3,500 Consultants reflects a combination of strong recruiting and a high level of confidence among our experienced Consultants," said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. "This has contributed to lower redemption rates and higher levels of sales activity."
Mutual fund assets at December 31, 2004 were $44.5 billion compared to $40.9 billion at December 31, 2003.
Investors Group's redemption rate at December 31, 2004, excluding money market funds, was 9.1% compared to 10.7% a year ago. The redemption rate for all other members of the Investment Funds Institute of Canada at December 31, 2004 was 15.3%.
Mackenzie Financial's Operations
Mackenzie led the industry in 2004 in sales of mutual funds through the financial advisory channel. Mutual fund sales for the year ended December 31, 2004 were $6.8 billion compared to $5.3 billion in the prior year. Mutual fund net sales for the period were $795 million compared to net redemptions of $69 million in the prior year. In the fourth quarter mutual fund sales were $1.7 billion, compared to $1.6 billion in the prior year, and mutual fund net sales were $123 million compared to $189 million last year.
Mackenzie's mutual fund assets at December 31, 2004 were $37.3 billion compared to $33.8 billion at December 31, 2003.
Mackenzie's redemption rate at December 31, 2004, excluding money market and managed yield funds, was 13.8% compared to 13.0% a year ago. The redemption rate for all other members of the Investment Funds Institute of Canada at December 31, 2004 was 14.8%.
TSX Stock Symbol Change
Consistent with the Company's change of name, IGM Financial will be changing its stock trading symbol on the Toronto Stock Exchange effective March 1, 2005 from IGI to IGM.
Dividends
The Board of Directors has declared a quarterly dividend of $0.359375 on the Company's 5.75% Non Cumulative First Preferred Shares, Series "A" payable on March 31, 2005 to shareholders of record on February 28, 2005 and has declared an increase in the quarterly dividend of 2 ¼ cents from 30 cents to 32 ¼ cents per share on the Company's common shares payable April 29, 2005 to shareholders of record on March 28, 2005.
Forward-Looking Information and Non-GAAP Financial Measures
This Release may contain forward-looking statements about IGM Financial Inc. (Company), including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Company due to, but not limited to, important factors such as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, catastrophic events, and the Company's ability to complete strategic transactions and integrate acquisitions. We caution that the foregoing list of important factors is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. The Company has no specific intention to update any forward looking statements whether as a result of new information, future events or otherwise.
Net income, earnings per share and return on common equity for the year ended December 31, 2004 are presented excluding unitholder compensation. Net income and earnings per share for the three months ended December 31, 2004 also excludes unitholder compensation. Net income, earnings per share and return on common equity for the year ended December 31, 2003 are presented excluding a dilution gain, a reversal of restructuring costs and a non-cash income tax charge. Net income and earnings per share for the three months ended December 31, 2003 are presented excluding a reversal of restructuring costs and a non-cash income tax charge. These are non-GAAP financial measures that do not have standard meanings and are not directly comparable to similar measures used by other issuers.
A review of activities and performance for IGM Financial Inc., together with financial details and a management discussion, will be published in the Company's 2004 Annual Report which should be mailed to shareholders on or about March 31, 2005.
IGM Financial Inc. is one of Canada's premier personal financial services companies, and the country's largest manager and distributor of mutual funds and other managed asset products. Its activities are carried out principally through Investors Group, Mackenzie Financial and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.
| For more information contact: | |||
|---|---|---|---|
| R. Jeffrey Orr President & CEO IGM Financial Inc. (204) 956-3332 jeff.orr@investorsgroup.com |
Greg D. Tretiak Chief Financial Officer, IGM Financial Inc. (204) 956-8748 greg.tretiak@investorsgroup.com |
Ron Arnst Media Relations Investors Group Inc. (204) 956-3364 ron.arnst@investorsgroup.com |
|
